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How George Osborne’s Minimum Wage Rise Will Mean Brutal Benefit Cuts For The Self-Employed

Plans to raise the minimum wage will mean a brutal benefit cut for the lowest earning self-employed workers due to complex changes to in-work benefits.

When Universal Credit is fully introduced (stop laughing) then anybody who is self-employed will be subject to the ‘Minimum Income Floor’. What this means is that when calculating in-work benefits, such as Tax Credits and Housing Benefit, the DWP will assume a level of income regardless of how much the self-employed worker is actually earning. For most people this means that the rate of benefits they receive will be based on them earning the equivalent of the minimum wage for 35 hours a week. This will apply even if they earnt nothing at all that month, potentially plunging people hundreds of pounds into rent arrears just because they’ve had a bit of a slow period.